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Markets Update: Nikkei futures are on the rise, with S&P 500 futures showing a 0.3% increase. Rate reductions are anticipated in Switzerland and Sweden within the current week. A number of Federal Reserve speakers are scheduled to appear as the market predicts another 50 basis points cut. Gold reaches a new all-time high, while oil prices surge due to Israel's attack on Hezbollah.
Economic Calendar
Global Markets Roundup: 23 September 2024
Asian global stocks strengthened on Monday as investors anticipated two more rate cuts from central bank meetings and positive U.S. inflation data, signaling further easing measures. China's central bank reduced its 14-day repo rate by 10 basis points, following earlier market disappointment over the absence of cuts in longer-term rates. Although analysts noted this adjustment merely aligned with a previous cut to 7-day repo rates, stocks responded positively, rising by 0.3%. Trading was thin due to a holiday in Japan, but MSCI's Asia-Pacific shares index excluding Japan (.MIAPJ0000PUS) increased by 0.3% after a 2.7% rebound last week. Singapore's primary index STI reached its highest level since late 2007.
The Nikkei 225 in Tokyo NI225 was closed, but its futures (NKc1) were trading at 38,510, up from the previous cash close of 37,723. Last week, the index surged by 3.1% as the yen weakened and the Bank of Japan (BOJ) indicated a cautious approach towards further policy tightening. EUROSTOXX 50 futures FESX1! rose by 0.5%, FTSE futures  Z1!by 0.3%, and DAX futures  DAX1! by 0.4%. S&P 500 futures  ES1! increased by 0.3%, while Nasdaq futures NQ1! gained 0.6%. The S&P has risen by 1% in September, historically known as the stock market's weakest month, and has achieved a 19% year-to-date increase, reaching record highs.
Friday saw over 20 billion shares traded on U.S. exchanges, marking the most active session since January 2021. According to analysts at BofA, the S&P typically increases by 21% in the 12 months following the commencement of Fed cuts, provided there is no recession. The market continued to benefit from the recent half-point rate cut by the Federal Reserve, with futures suggesting a 50% chance of another significant cut in November. This week, at least nine Federal Reserve policymakers will be speaking, with Chair Jerome Powell, two governors, and New York Fed President John Williams delivering prepared remarks. The extent of further cuts will largely hinge on the performance of the Fed's favored inflation measure, the core personal consumption expenditures (PCE), set to be revealed on Friday. Analysts anticipate a 0.2% increase month-on-month, pushing the annual rate to 2.7%, while the headline index is projected to decelerate to 2.3%.
The dollar in currency markets increased by 0.3% to 144.30 yen USDJPY, following a 2.2% rise from a 139.58 low the previous week. The euro also saw a rise of nearly 3% last week, reaching 161.09 yen EURJPY, and maintained its strength against the dollar at $1.1160 EURUSD. The Liberal Democratic Party of Japan, holding a majority in parliament, is set to choose a new leader on September 27, who will succeed the current Prime Minister Fumio Kishida.
The U.S. interest rate reduction, along with decreased bond yields, contributed to maintaining gold at a record high of $2,630.93 per ounce. Net long positions in Comex GOLD futures reached their highest level in four years last week, indicating a potential pullback in the near future. Oil prices strengthened further, partly due to tensions in the Middle East as Israel targeted Hezbollah. Oil prices surged by approximately 4% last week, buoyed by expectations that lower interest rates would boost global economic growth and demand. Brent BRN1! rose by 60 cents to $75.09 per barrel, while U.S. crude CL1! increased by 63 cents to $71.63 per barrel.
The upcoming week will feature surveys on global manufacturing, U.S. consumer confidence, and durable goods. The Swiss National Bank is scheduled to meet on Thursday, and the markets are anticipating a 1.0% cut, with a 41% possibility of a larger cut of 50 basis points. Similarly, Sweden's central bank will convene on Wednesday, with expectations of a 25 basis points reduction, and a chance of a bigger cut. In contrast, the Reserve Bank of Australia (RBA) is set to meet on Tuesday and is highly likely to maintain the interest rate at 4.35% due to persistent inflation. Additionally, investors are closely monitoring negotiations to prevent a U.S. government shutdown as the current $1.2 trillion funding is set to expire on Sept. 30. Republican U.S. House of Representatives Speaker Mike Johnson has proposed a three-month stopgap funding bill on Sunday, which now awaits a vote.
General news - Information source from multiple newswires.
The article and the data is for general information use only, not advice!
The Trade Academy Team